Critics worry UnitedHealthcare could use its market dominance to deny services to Medicaid members and trim payments to the healthcare agencies serving those people. Foltz denied her company has any such plans.

“We are not benefited by restricting individuals from getting the things they need. If we do that, that generally results in higher costs,” she said in an interview at her West Des Moines headquarters. “We have a vested interest to make sure people get what they need.”

AmeriHealth’s abrupt departure is the latest twist in Iowa’s complicated and controversial shift to private management of its $4 billion Medicaid system. AmeriHealth, UnitedHealthcare and a third company, Amerigroup, have complained about losing hundreds of millions of dollars since the project started in 2016.

Foltz has complained in the past that Iowa’s private Medicaid program was “drastically underfunded.” She said Thursday she expects her company to continue losing money in Iowa for at least the next few months, but she has faith that the situation will turn around as Iowa’s Medicaid system becomes more efficient. “We are committed to the long-term, sustainable success of this program,” she said.

State Human Services Director Jerry Foxhoven told legislators last month the state would pay UnitedHealthcare about $3 million to help cover the transition costs of taking on more than 200,000 former AmeriHealth members. Foltz said that her company’s complicated contract with the state did not contain any other special inducements to take responsibility for those Iowans.

She said Iowa’s Medicaid system probably will need more state and federal money in the future. “We expect the program to be appropriately funded to support the needs of the individuals it serves,” she said.

Foltz said UnitedHealthcare is hiring more than 400 staff members and is aggressively negotiating contracts with clinics and service agencies that hadn’t already signed on with the company. For at least a month, she said, her company will pay 100 percent of standard rates for services provided by companies that are negotiating new contracts. And it is required to pay at least 80 percent of standard rates to any service provider that participates in Iowa’s Medicaid program. She added that her company already has a “robust network” of service providers that are serving its members.

Foltz said she understands that many Iowans are nervous about the changes, which have been announced over the past few weeks.

Count Jenny Gero of Des Moines among the legions of frustrated consumers.

Gero has been unable to get a straight answer about what kind of Medicaid insurance her son, Paul Depagnier, would have starting Friday.

“It’s just been a confusing nightmare,” Gero said.

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Jennifer Gero, her son, Paul Depagnier, and their dog, Chaney, at their home in Des Moines. Depagnier had Medicaid benefits via AmeriHealth before the company withdrew from Iowa's Medicaid program effective Nov. 30.(Photo11: Tony Leys/The Register)

Depagnier, 25, has Medicaid because he’s disabled by autism, bipolar disorder and other issues. Like most Iowans with serious disabilities, his family chose AmeriHealth because it let him keep his former case manager. After AmeriHealth’s decision to leave the state was disclosed Oct. 31, Gero tried to enroll Depagnier with Amerigroup. She chose Amerigroup because it had contracts with most of Depagnier’s doctors and other medical providers.

Amerigroup sent him a membership card, so his coverage seemed to be set, his mother said. But then state officials said last week that Amerigroup wasn’t taking any of AmeriHealth’s former members, and that 10,000 of those poor or disabled Iowans would wind up having their benefits directly overseen by state administrators for the time being.

Gero has been unable to confirm who will be overseeing her son’s benefits on Friday. He will get a new case manager, and he might have to switch doctors.

“A change for somebody who doesn’t have one of these disabilities is hard. A change for somebody like Paul can be devastating,” Gero said.

Deb Gleason of Edgewood, whose adult daughter is on Medicaid, said Iowans who use the program don’t know what to make of the confusing and contradictory messages coming out of the Department of Human Services.

“I think almost to a person, they feel they’ve been deceived, and that the deception has been deliberate,” she said. “They no longer believe anything anybody says.”

Gleason helps run a Facebook page called “MCO Watchdog,” on which nearly 3,000 Iowans post about their experiences with the privately run Medicaid program.

Gleason said she doesn’t understand how it’s legal for Iowa to only offer one choice of managed care companies to most people on Medicaid. The state originally hired four managed care companies, which were supposed to compete with each other to provide good service to Iowans on Medicaid. Now all new Medicaid members will be placed with UnitedHealthcare, as will most former AmeriHealth members. “The idea of privatization is based on competition, and there isn’t any competition anymore,” she said.

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AmeriHealth Caritas notified Iowa officials that it no longer wants to participate in the controversial project, which began last year.

The Department of Human Services has said the lack of competition will be temporary. It plans to hire a new managed care company by July 2019, and it says Amerigroup intends to resume taking new members at some point. Department spokesman Matt Highland declined Thursday to be specific about when Medicaid members could expect that to happen. "When Amerigroup Iowa and the department are confident they have the capacity to take new members, members will be notified that choice is available," he wrote in an email to the Register.

Medicaid is jointly financed by federal and state governments, and federal officials must sign off on major changes. Iowa officials have said they don't need federal permission to temporarily give Medicaid participants just one choice of management companies.

A national expert said it’s fairly common for states that are getting started in Medicaid managed-care to see turnover in the companies running their programs. “There’s a lot of market settling – people will come in, people will go out,” said Matt Salo, executive director of the National Association of Medicaid Directors.

Salo, who supports the concept of private Medicaid management, said no one disputes the role of competition in encouraging companies to give good service. In general, he said, supporters of the idea believe states should have at least three managed-care companies competing against each other.

In a pinch like Iowa is now facing, Salo said, federal officials have been willing to let states temporarily limit members’ choices to just one managed-care company. “But they probably wouldn’t be like, ‘OK, you can do this forever,’” he said.

Georgetown University health-policy researcher Andy Schneider noted that when Iowa applied for federal permission to hire private Medicaid managers, it promised that all members would have at least two companies to choose from. It will be up to federal officials to decide how long to let Iowa offer just one choice to many Medicaid beneficiaries, said Schneider, who studies the Medicaid system.

Schneider noted that proponents of private Medicaid management tout competition among the management companies as one of the main benefits to consumers. If consumers don’t like the service or networks provided by one company, they are supposed to be able to switch to another one. “In theory, that’s what keeps the plan on its toes and worrying about you,” he said. “…It’s absolutely fundamental.”

A lack of such competition also could put hospitals, clinics and community service providers at a disadvantage in contract negotiations with the management companies, Schneider said. If most or all of a state’s Medicaid members are with one management company, that company could effectively dictate contract terms to service providers, he said.

Democratic state Sens. Amanda Ragan and Liz Mathis asked Republican Gov. Kim Reynolds this week to give former AmeriHealth members another 30 days to switch to either UnitedHealthcare or state-managed Medicaid plans. They said the delay should be made, "in the name of fairness and choice."

But the governor turned down the request. She told reporters earlier this week that she stands by the state's shift to private Medicaid management. "It’s not perfect. I’ve never said it was perfect," she said. "I’m willing to put the time and the effort into making sure that Iowans get the care that they deserve in a managed and coordinated and more modern delivery system. I’m not going back."